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Official: P&G denies closing its Agbara plant over stiff competition

More facts have emerged on why Procter and Gamble Nigeria Plc shut its $300 million manufacturing plant in Agbara, Ogun State.

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More facts have emerged on why Procter and Gamble Nigeria Plc shut its $300 million manufacturing plant in Agbara, Ogun State.

The plant which is the single largest non-oil investment of the United States in the country was officially opened by Vice-President Yemi Osinbajo.

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In an e-mail response to Nairametrics inquiry, P&G confirmed it is exiting its Agbara plant as part of its restructuring exercise in its Nigeria Operations, contrary to our earlier report that the closure was due to stiff competition.

“P&G is restructuring its Nigeria manufacturing operations to deliver a more effective business operation for now and sustainably for the future. This will entail an exit from production in its Agbara plant. We will strengthen our manufacturing operations in the Ibadan plant, scale up our contract manufacturing operations as well as continue to invest in our local talents.”

The company also maintained that it believes in “Nigeria’s potential and are here to stay for the long haul developing our Nigerian talent, manufacturing operations in the Ibadan plant, scale up our contract manufacturing operations as well as continue to invest in our local talents.”

The Harsh Economic Landscape

The leading consumer goods shutdown due to the high cost of production caused by several factors these include an accumulation of the import duties payable on 75 percent of imported raw materials, the company still depends on foreign-sourced raw materials for its production, also the high cost of power generation also impacted negatively on the bottom line of the company.

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Attempts by the company for a waiver from revenue agencies such as the Nigerian Customs Service did not materialise.

Recall that Procter & Gamble Agbara Plant was officially opened in 2014 and a new production line opened commissioned in 2017 by the Vice President, Professor Yemi Osinbajo. P&G spent a  whopping sum of $300 million to construct it at the time, the largest single US investment by a company in the country. The state of the art production plant sits on some 40.2 hectares of land.

Sources also suggest the company faced significant challenges with the state of the art facility that is installed in the plant. From having to provide their own independent power supply to quality control issues due to challenges in importing raw materials, production became sub-optimal and nowhere close to the standards espoused by the company. Other challenges include lack of quality access road for effective distribution of their products from plant to warehouses reducing investory turnovers.

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Stiff Competition in the consumer goods sector

Though P&G will not admit, one of the major challenges facing players in the consumer goods sector, particularly diapers and sanitary towel is a stiff competition in the market. There are currently more than a dozen brands of diapers and sanitary pads in the country, including Pampers, Molfix, Always, Nice Baby, Angel, Dry Love, Huggies, etc.

A research into the prevailing competition in the pampers industry shows that Hayat Kimya Group, makers of Molfix, is leading the market with a 44% market share.

Procter & Gamble came in second with a 37.3% market share, with the rest of the brands were, however, relegated to a little corner in the market where they now share 18.4% market share.

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Much like P&G, Hayat Kimya Group last commissioned a $100 million production plant in Agbara which still operates. Now in view of P&G’s impending divestment moves, Hayat Kimya Group is at a greater advantage of taking over a greater position of the market share.

Procter & Gamble is a multinational company with operations in at least 180 countries around the world. Its fast and moving (FMCG) products include Always Sanitary Pads, Pampers Baby Diapers, Gillette Shaving Stick, Ariel Detergent, and Oral B Toothpaste.


Note: This article was updated to relfect new information.

Patricia

Fikayo has a degree in computer science with economics from Obafemi Awolowo University. ITIL v3 in IT service management. An alumnus of Daystar Leadership Academy. Prior to joining Nairametrics had stinct in Project management, Telecommunications among others. Also training in Consulting and Investment banking from Edubridge Academy. He has very keen interest in Politics, Agri-business, private equity and global economics. He loves travelling and watching football. You can contact him via [email protected]

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Coronavirus

Nigerian Governors who have tested positive for Coronavirus 

Six Nigerian governors have contracted the novel coronavirus, but some have recovered.

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On Saturday, July 4, Ebonyi State Governor, David Umahi announced that he had tested positive for COVID-19. This makes him the 6th Governor to have tested positive for the virus that has infected over 11 million and killed no less than 532,000 people globally. 

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Kaduna State Governor, Nasir El- Rufai was the first governor confirmed to have been infected and recovered in April. 

Bauchi State Governor, Bala Mohammed, was also infected in March and was reported to have recovered on the 9th of April. 

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Oyo State Governor, Seyi Makinde, announced that he tested positive on 30th, March, 2020 and his recovery was reported on the 5th of April. 

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Ondo State Governor, Rotimi Akeredolu, tested positive last week on June 30th and Delta’s Ifeanyi Okowa announced that he and his wife had tested positive on July 1. 

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So far, the governors who have tested positive for COVID-19 are:    

 

1. Nasir el-Rufai

2. Bala Mohammed

3. Seyi Makinde

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4. Rotimi Akeredolu

5. Ifeanyi Okowa

6. David Umahi

 

Patricia
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Energy

BUA cement to build power and cement plants in Adamawa state

BUA Cement’s newest plant in Sokoto is expected to be operational in 2021.

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NPA Decommissioning of Port Harcourt Terminal: We'll vigorously defend, protect our rights - BUA Group, NPA and BUA Group dispute to affect 1000 jobs, $500,000 monthly revenue, Terminal closure: BUA clears air on NPA’s claims , Forbes 2020 world’s richest rankings released: Only 4 Nigerians make exclusive billionaires list

BUA Cement has announced plans to build a 50 megawatts power plant and 3 million metric tonnes cement plant in Lamurde and Guyuk local governments in Adamawa States.

BUA Cement which is Nigeria’s second-largest cement producer by volume with plants in Sokoto and Edo States, with the projects wants the boost the country’s power supply and increase the local production capacity for cement.

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This was disclosed by the Chairman of BUA Cement, Abdul Samad Rabiu, in a press statement on Sunday, July 5, 2020, in Lagos.

The BUA Cement Chairman who led the company’s management team on a courtesy visit to the Adamawa State Governor, Ahmadu Umaru Fintiri, after preliminary findings showed that Guyuk and Lamurde areas had quality limestone.

According to Rabiu, “Preliminary findings show that the two local governments of Guyuk and Lamurde are reputed to have good quality limestone deposits and BUA Cement is ready to begin the investment in the state.

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“BUA will use new technologies to supply power to the proposed cement plant and communities of Guyuk and Lamurde in addition to providing three thousand direct and five thousand indirect jobs.

“Guyuk Cement Plant will be a major investment in the North-East by BUA, while we solicit the support of Gov. Umaru Fintiri to set up the factory in Guyuk.”

READ MORE: 10 fantastic things Aliko Dangote has done in the last 10 years

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He added that while the company has invested billions of dollars in various sectors across Nigeria, it has taken a decision to source its raw materials locally and therefore urged the Adamawa state government to support BUA to actualize the GUYUK Cement project.

The Adamawa State Governor, Ahmadu Fintiri, in his response assured the Chairman and management team of BUA, that the state government would provide all the necessary support and make available whatever was needed to make the projects a reality.

BUA Cement’s newest plant in Sokoto is expected to be operational in 2021 and expects that its total production capacity will get to 14 million metric tonnes of cement per annum upon the completion of Guyuk Cement Plant.

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BUA Cement has been having a running battle with Dangote Cement over the ownership of 3 mining sites in Obu and Okpella in Edo State. The mining sites have been subject of legal tussle between the 2 biggest cement companies in the country.

 

Patricia
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Coronavirus

GSK, Sanofi to agree $624 million deal with UK for COVID-19 vaccine

Both GSK and Sanofi said that they are placing more priority on quality rather than speed.

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GSK, Sanofi to agree $624 million deal with UK for covid-19 vaccine

British and French pharmaceutical giants, GlaxoSmithKline (GSK) and Sanofi are close to reaching a $624 million (500 million pounds) deal with the United Kingdom (UK) government for the supply of 60 million doses of coronavirus vaccine as many countries move for possible COVID-19 treatments.

Reports suggest that the UK was considering an option to buy the vaccine should the human trials, which are due to commence in September 2020, turn out successful.

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The funds would be paid in stages as the vaccine progresses, with the final payment made on delivery.

In order not to be left behind, the UK government has been engaging a wide range of companies both at home and abroad to negotiate access to vaccines. They said that the right announcements of these arrangements will be made as and when agreements with any of these companies are finalized.

The British business ministry’s spokeswoman, who confirmed that the ministry is handling Britain’s supply of potential COVID-19 vaccines, said talks were going on with different parties about access to possible vaccines but didn’t confirm if GSK/Sanofi project was one of them.

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READ MORE: Pfizer’s COVID-19 vaccine shows positive results

According to the ministry official, ‘’The Government’s Vaccines Task Force is actively engaging with a wide range of companies both in the UK and abroad to negotiate access to vaccines.”

“Appropriate announcements of these arrangements will be made as and when agreements with any of these companies are finalized and signed.

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Sanofi is presently working on 2 possible COVID-19 vaccines, one of which uses an adjuvant made by GSK to potentially boost its efficacy. The timeline for its clinical trials is behind the likes of Moderna Inc, the University of Oxford in collaboration with AstraZeneca Plc and an alliance of BioNTech and Pfizer Inc, whose projects all made headlines by moving to human trials as early as March.

Both GSK and Sanofi said that they are placing more priority on quality rather than speed in developing a vaccine.

 

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Patricia
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